• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Invest with Steve!

Financial Planner | Financial Advisor | La Verne, CA |San Dimas, CA|Glendora, CA| Claremont, CA | West Covina, CA| Covina, CA| Brea, CA| Pomona, CA | Upland, CA Reh Wealth Advisors

Stephen Reh CFA® MBA CFP®

I love helping people reach their financial and investment goals. Call me today at 909-518-2134 to setup a free no obligation 1 hour consultation.

NAPFA-Registered Financial Advisor
  • Home
  • Ideal Clients
    • Financial Advisor For Business Owners
    • Financial Advisor For Corporate Executives
    • Financial Advisor For Families
  • Services
    • Investment Management
    • Retirement Planning and Cash Flow Analysis
    • Net Worth Planning and Analysis
    • Estate and Gift Planning
    • Property and Casualty Insurance Review
    • Education Planning
    • Tax Planning
  • Our Articles / Blog
  • About Steve! Your Fee Only Financial Advisor
    • Reh Wealth Advisors LLC Privacy Policy
  • Online Account Access
  • Contact Us

2020 Corona Virus Market Correction

February 27, 2020 By Stephen Reh MBA CFA® CFP®

The corona virus continues to dominate the financial press and has resulted in one of the fastest 10% drops in the stock market that we have seen. While its been fast and furious, I think its important to remember that throughout history the patient investor has been rewarded for taking risk and staying in the market.

The Average Drop in any given year from the market high is 13.8%

As the chart above shows, in any given year we see an average drop of 13.8% from the market high. Even with the recent 10% drop the S&P500 quickly saw. We still have not gone beyond a “normal” stock market pull back. While it can be difficult its important to remember the patient investor is rewarded.

While less common, we can see market corrections of 20% like we saw near the end of 2018. Investors that were patient and stayed invested, enjoyed a great 2019.

It has Always been a bumpy ride even when hindsight feels smooth

The past run since 2008 has survived:

  • Muni Bond “Crisis” – some analysts were calling for massive losses in the municipal bond market and that it would not only hurt the bond market but would hurt equities. Neither the bond market or stock market sufferred and its been a long time since we have heard concerns about massive amounts of muni bond defaults.
  • Greece’s Economic Mess would take down Europe and the US would follow – The market dropped in 2011 but it was short lived and the market continued its climb
  • War on terrorism
  • Previous Epidemic Scares
    • Swine Flu in 2009
    • Cholera in 2010
    • MERS in 2013
    • Ebola in 2014
    • Measles/Rubeola End of 2014 Early 2015
    • Zika Virus at Olympics in 2016
    • Measles/Rebeola 2019

Previous Epidemics have had minimal long term impacts on the Market

You can read the article I wrote a few days ago which discusses the previous impacts of epidemics here:

Corona Virus – History Lesson

Doing the “Right” thing feels a little wrong

There is a temptation to “do something” despite research showing us that time and time again, the best advice is to persevere through market pull backs and corrections. Trying to time the market is paved with people that have failed attempting to do so. Here is a quick reminder of the rewards of sticking to our model and long term plan:

This chart from JP Morgan shows us a few things. The Average investor under performs nearly any asset class over the past 20 years. The only way the average investor can under perform nearly every investment is by market timing or by jumping from one fad to the next. Had the investor stuck with a 60/40 portfolio they would have earned over 3% higher returns. Bear in mind the past 20 years from 1998 to 2018 are starting at nearly the peak of the dot com bubble. So the returns are inclusive of both the dot com bubble bursting and the financial crisis.

The next thing to remember is that 2008 was the worst stock market of our lifetimes. However, the recovery came swift and a return to value

  • 40% stocks/60% bond portfolio recovering by November 2009
  • 60% stocks / 40% bond portfolio recovering fully by October 2010
  • The 100% stock S&P500 recovered full by March 2012

A Reminder not to let short term results impact your long term plan

Its often easy to say that we should invest for the long term and stick to our plan. However, once we are in the middle of a market correction, it can be challenging. Here is a reminder of the article I sent the last time the market dropped 20% in 2018 before having a great 2019:

Market Correction – Do Not Let a Market Drop Ruin Your Long Term Investment Plan

Clients should not hesitate reaching out to me to schedule a meeting or call. I am here and working on helping you reach your financial goals.

** The information on this website is intended only for informational purposes.  Reh Wealth Advisor clients should discuss with their advisor if any action is appropriate.

If you enjoyed the article consider sharing it:
Tweet

Filed Under: Investments, Market - Economic Analysis

About Stephen Reh MBA CFA® CFP®

I am Steve Reh the founder of Invest with Steve and Reh Wealth Advisors LLC. Thank you for visiting my website.

Contact me to setup your free, no obligation, 1 hour consultation.

Primary Sidebar

Our Articles

  • Articles
    • College Savings
      • 529 Plans
    • Estate Planning
    • Financial Planning
    • Investments
      • IRA Rollovers
      • Market – Economic Analysis
    • Investor Protection
    • Mortgage
    • Property and Casualty Insurance
    • Retirement Plans – 401ks
    • Tax Planning
    • Uncategorized

    Contact Steve For Your Free, No Obligation, 1 hour Meeting.

    Your Name (required)

    Your Email (required)

    Subject

    Your Message

    Our Most Recent Financial Articles

    2022 May Stock Market Drop

    The S&P500 has not hit the “20%” mark for a market correction but we have hit 14% drop since our last market high for the year. I wanted to provide you some analysis and commentary but ultimately we will want to remain patient and not attempt to time the stock market. Early in the Year […]

    SBA EIDL Updates

    THE SBA HAS RELEASED THE FOLLOWING UPDATES (PLEASE NOTE ALL THAT FOLLOWS IS FROM THE SBA). On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). […]

    Small Business Help – EIDL and PPP

    There are two programs for small business owners, the EIDL loan/grant and the PPP (payment protection plan) loan. Both offer assistance for small businesses. Information is coming out rapidly and the details do seem to be changing slightly as it comes out. EIDL – Economic Injury Disaster Loan This loan is taken out directly from […]

    View Stephen Reh,CFA® MBA CFP®'s profile on LinkedIn

    Footer

    Invest With Steve!

    Stephen Reh CFA® MBA CFP®
    Reh Wealth Advisors LLC
    466 W Arrow Hwy Unit K
    San Dimas, CA 91773
    Mobile:909.518.2134
    Office:909.962.8023
    steve@investwithsteve.com


    Connect with us!

    • Email
    • Facebook
    • Google+
    • LinkedIn
    • Twitter


    Our FInancial Articles/Blog

    Financial Links

    Contact Us
    • Home
    • Ideal Clients
    • Services
    • Our Articles / Blog
    • About Steve! Your Fee Only Financial Advisor
    • Online Account Access
    • Contact Us

    Reh Wealth Advisors LLC is a registered investment advisor offering advisory services in the State of California and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Reh Wealth Advisors LLC in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption. All written content on this site is for information purposes only. Opinions expressed herein are solely those of Reh Wealth Advisors LLC unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.


    Anyone with facing challenges with accessibility of this website, please call us at 909-962-8023 or email us at steve@investwithsteve.com and we will provide accommodations for our services to you. We have a tool bar to increase contrast and to change text size. We have attempted to make our site as accessible as possible.